The new rules require companies to file a "country-by-country" report as well as creating new specific documentation requirements.
For the fiscal year beginning 1 January 2016, country-by-country (CbC) reporting will be compulsory for corporate groups whose turnover exceeds EUR750 million in the 12 months prior to the information period.
This documentation must be filed with the Tax Administration within 12 months following the end of the taxpayer's fiscal year. A specific form will be published for this purpose.
The CbC report – with respect to the tax period of the parent company, aggregated (for each country or jurisdiction) and denominated in euros – must include the following information: gross revenues of the group, results before CIT (or similar tax) expense, amount of CIT (paid or accrued) including withholding taxes, turnover of capital and other funds existing at the end of the tax period, average number of employees, tangible assets and investment property other than cash and credit rights, list of resident entities including permanent establishments and the main activities carried out, as well as any other relevant information.
Transfer pricing documentation
The obligation to draw up transfer pricing documentation is unrelated to the CbC report. This specific documentation could be requested by the tax authorities following the conclusion of the voluntary period for filing the annual corporate income tax return (i.e., six months after the end of the taxpayer's fiscal year). The latest developments are:
For the fiscal years beginning on or after 1 January 2016, for corporate groups whose turnover is equal to or greater than EUR45 million in the previous financial year, new information related to the group activities is now required, including intangible assets and other financial activities as well as new information regarding the taxpayer, its competitors, any previous agreements in force and the taxpayer's financial information.
For entities whose turnover (together with turnover of related entities) is less than EUR45 million in the previous year, there are no transfer pricing documentation obligations for the corporate group. Except for certain operations, specific documentation required from the taxpayer is significantly reduced. The documentation must describe the number of transactions and indicate the related entities, as well as the valuation method implemented, comparable data and values. Smaller entities must use a standard document.